A new in-depth report commissioned by the Illinois Chamber of Commerce paints a truly mixed picture of the state’s economic health.

It found that Illinois is still fairly prosperous compared to other states, but it is struggling to grow economically at the national pace.

Illinois scores well compared to other states in some areas tied to economic growth, like having a well-prepared workforce and a quality physical infrastructure. It scores dismally in others, like its regulatory environment.

“It’s just like a report card for students,” said chamber president Doug Whitley. “If you get D’s, you might say maybe we need to get a B. If you get C’s, you might ask is average good enough. The bottom line is we don’t think Illinois is doing enough to stay ahead of the curve to compete with other states for a lot of these economic development projects.”

The bottom line also is that the Illinois Economic Competitiveness Scorecard will serve as the basis for pushing change in Illinois, although Whitley said the chamber has not developed a legislative agenda based on the report’s findings.

“The outcome of the report more than anything else is to try to point some fingers or identify some areas we need to pay more attention to,” Whitley said. “It’s incumbent on the governor’s office to give us some leadership in some of these areas. All we are trying to do is point them in the right direction.”

Katie Ridgway, spokeswoman for Gov. Rod Blagojevich, had no comment on the report’s findings.

“Usually, when we look at economic data, we look at universally recognized federal sources,” Ridgway said in an e-mailed statement. “Without knowing the sources of the data they are providing here, it would be difficult to comment on its veracity.”

She said the administration continues to be successful in bringing new business to Illinois, but “we are always open to hearing suggestions on ways to improve it.”

If the goal for Illinois is to stay ahead of the curve compared to other states, it is falling short, the report found. Illinois’ ranking in Gross Domestic Product, a key measure of economic activity, dropped from 10th nationally in 2003 to 13th in 2006. That was one reason the report gave Illinois a D+ grade in its economic growth index.

Illinois is still above average nationally for per-capita income. But in 1956, it ranked sixth in that category, and by 2006, it had dropped to 16th.

Those two grades are supposed to measure the state’s overall economic health. But the study looks at 79 areas of economic statistics to come up with the overall grades.

For example, Illinois gets a C- in the category of business costs, which in turn come from the state’s rankings in labor costs, energy costs, worker-compensation expenses, unemployment insurance costs, business tax burden, business tax structure, metro office rents, small-business health-care premiums and large-business health-care premiums.

In those categories, Illinois did best on energy costs.

But that also points up one of the shortcomings of the report. It is based on 2006 statistics, the latest year for which complete data was available. Whitley noted that when the report was completed, Illinois still had a cap on energy costs.

“I have a suspicion that will go up,” he said. “These higher energy costs don’t show up yet.”

That’s one reason both Whitley and the report’s author, Graham Toft of GrowthEconomics, said the study has to be repeated in the future. The chamber plans to update the study in two years, which will show if the state showed improvement or fell further behind in its rankings with other states.

“The first report is really not quite as important as later reports,” Whitley said. “The first report is supposed to give you a benchmark, and then the question is what do you do about it.”

“This is a quick way to take a snapshot to kind of see how you fit,” Toft said. “The best way to use this is to say, OK, we’re not doing so well here, who is doing well and let’s ask why they are doing well and what we can learn from them.”

Not all news in the scorecard was bad. Whitley said he was “pleasantly surprised” that Illinois scored a B in education.

“Compared to other states, our system is, in fact, putting out better students,” Whitley said.

The study looked at things like how the state ranks in college degrees awarded, high school graduation rates, math and reading test scores and scores on ACT and SAT college entrance exams. In fact, the study ranked Illinois first in SAT scores based on a criteria that students taking it performed better than predicted. At the same time, Illinois scored only 39th in ACT scores.

Some of that disparity likely is due to Illinois being one of only three states that require all students to take the ACT, whether or not they plan to attend college. While only 10,000 students took the SAT this past school year, 140,000 took the ACT, said Matt Vanover, spokesman for the State Board of Education.

The report gave Illinois a B in physical infrastructure, including highway and bridge quality, water systems, rail transportation and airports. Illinois scored well in all such categories except highway quality, where it ranked 45th.

“We have a great infrastructure in place,” Whitley said. “Our concern is are we going to allow it to deteriorate to the point it’s a detriment to the economy.”

Of the state’s D- minus grade (and 49th rank) for regulatory environment, Whitely said he was “disappointed, but not surprised.” Included in the category are things like medical malpractice costs, health-care mandates, business liability insurance costs and the fairness of the state’s civil lawsuit system, long a complaint of the business community.

Nothing in the scorecard recommends how to improve the grades. It sets a benchmark for Illinois, Toft said, and leaves it up to state leaders to determine what to do.

“It seems to be Illinois leaders have to reach out and ask the question: “We have been slowing. We’ve got some areas of vulnerability. We really have to get to work to stay competitive in a global economy,” Toft said. “That’s the message I get out of it.”

Doug Finke can be reached at (217) 788-1527 or doug.finke@sj-r.com.

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